Diary of a Novice CFD Trader

waza1960 said:

I like the flexibility of CFDs and won't give up on them until I master them.I also like trading multiple products.Its just that I need more education and experience but I won't give up but you are right if my personality was different it would probably be wiser just to stick to what you know

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Congratulations for having the balls to admit your mistakes to the forum. So many here are fairweather posters that only discuss their success. Don't worry, you are not alone and the great majority of traders and investors have made a donation to Mr Market. You just don't hear about it so often.

If you're game, perhaps you can post some of your trades (what, why you entered, when, price, planned exit, actual exit, position size, why you exited) and they can be discussed here. I'm sure you'll learn plenty, as well the countless others that don't have the courage you do.

Here's a good story for you. I've been continuing my intraday experimentation with $10 a side CFD trades. I was short on WOW while some unusually large orders were holding up the market at particular price. I was sitting on an $12 profit - $20 commission round trip and saw that if the the buy dropped out, market would easily fall several cents and I would be in the black overall. I waited 30 minutes for this buyer to budge, but in the end I had things to do and at the first sign the market was moving against me I bought at market.

4 seconds later the buyers vanished/were sold and the price dropped 5c immediately. Don't you love it when stuff like that happens?

It is amasing how similar Trading and playing NL Holdem is to one another.

People go on tilt, traders and poker players and the same thing that can be said at the end of the day is that, when you lose concetration and allow emotion to creep in, then you will lose money


Its good to take some beats. I know i have just recently, the last few days, every time I live trade, if I go short, I should have been long, if I went long, I should have been short.

The times that I wanted to go short, and didnt get in at the price I wanted, the market went the right way. i.e. RIO today.

When that sort of thing happens it is good just to turn the PC off for the day and take the dog for a walk.

I've found that trading with a tiny contract size helps maintain discipline:

1 Contract ASX200 Mini ($5)

Since the Profits and losses are much smaller, you're better able to focus on the trade rather than how much you can make or lose.

Well despite CFD losses am a little more positive having some small gains with much reduced position sizing and making good profit from BHP and Oxiana Options sold Friday

Waz,

Thanks for posting your initial real time experiences on CFD trading.

I am in my cfd trading infancy also, but have started off on smaller amounts, wanting to feel my way and adjust my trading plan with real experience (paper trading just doesn't do it for me). I have been successful in principle (i.e. in picking stocks to long/short and when to buy in) but have butchered my profits with inexperience and an itchy exit trigger finger!

Anyway my advice for what it is worth, i am a professional punter (horses) and can tell you the mental side of things are almost exactly the same between betting and trading, you really need to have a rock solid trading plan with strict rules to trade/punt by. Not to oversimplify, indeed you may still be able to trade profitably, but won't reach your full potential unless you approach each trade as totally independent of all other trades (unless different transactions are part of the same position).

I agree with Woodrel, assess all trades once closed, reviewing why it worked/failed, was it your plan or it's innaccurate execution?

Very interested in hearing how you fair in the future, i will start posting some of my trades shortly also,

Good luck

waza1960 said:

Well despite CFD losses am a little more positive having some small gains with much reduced position sizing and making good profit from BHP and Oxiana Options sold Friday

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Wazza and other new CFD traders.

Position size when your new to any leveraged product makes all the difference.

As in my PM to Wazza, I got smashing after smashing last year in my CFD start out.

Really knocked me for six but as in all things, life goes on.

So the only advice I will give any new CFD trader is start on tiny positions get used to leverage, have a strict plan/rules on entry and exits never break your rules and always be patient the market will always be here tomorrow.

Trade_It said:

Wazza and other new CFD traders.

So the only advice I will give any new CFD trader is start on tiny positions get used to leverage, have a strict plan/rules on entry and exits never break your rules and always be patient the market will always be here tomorrow.

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this is true. Start small. I have learned one thing for sure. Missed money is better than lost money. So like everyone says ...firm rules for entry n exit.